Tuesday, February 28, 2017

Mining firm airs its side

By Ernesto Hilario - February 20, 2017

Last week Department of Environment and Natural Resources (DENR) Secretary Regina Paz L. Lopez announced that she had canceled 75 mineral production sharing agreements (MPSAs) because these are located in watershed areas.
Among those included in her list was the MPSA of Silangan Mindanao Mining Co. Inc., a wholly owned subsidiary of  Philex Mining Corp.
Silangan is a copper and gold project in Surigao del Norte in Mindanao. It is still in the exploration stage, but starting in 2020, it will, for the first 10 years of operation, generate P170 billion in revenues, P31 billion in national and local taxes, and at least 8,000 jobs. Silangan Mining also plans to spend P6 billion over the same 10-year period for social development and infrastructure programs that will benefit Mindanao, an area that President Duterte has targeted as a top priority of his administration’s socioeconomic development agenda.
Silangan Mining secured its MPSA for the Silangan project from the DENR only after a thorough review process by all relevant government agencies and the approval of the host communities and local government units.Philex, the parent company of Silangan Mining, says it has a long-standing policy to strictly comply with all applicable laws and regulations, particularly those pertaining to social development, as well as environmental protection and rehabilitation.
And the mining firm insists that none of the areas covered by the Silangan Mining MPSA is located in a watershed forest reserve, where mining is prohibited, and that Silangan Mining’s MPSA is valid and can withstand any legal challenge.
Philex concedes that while the DENR, as regulator, has the right, if not also the duty, to enforce faithfully all mining laws, and to wield its powers against errant mining companies, it must do so within the ambit of due process.
What the DENR’s announcement on the cancellation of MPSAs has caused is unexpected economic harm to Philex shareholders, including the Social Security System and its beneficiaries, through a sharp decline in its share price, equivalent to approximately P6.5 billion in shareholder value in one day. More than this, it has put the Silangan project, which is nearing implementation, under a shadow of doubt.
Philex believes that the DENR pronouncement has eroded investor confidence in the entire Philippine mining industry because the regulatory framework of the government agency appeared to disregard due process.
Four tenements of another Philex subsidiary, Philex Gold Philippines Inc. (PGPI), have also been included in the list for MPSA cancellation. Philex says all these MPSAs have been validly issued and are not located in watershed forest reserves.  Philex and its subsidiaries have expressed full support for  the government’s efforts to protect the environment, combat poverty and unemployment, and to uphold the rule of law and due process.

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